Retirement and the Pension Crisis

Abstract

In many countries the state pension age is rising. 1 Governments often present this as a reflection of increasing life expectancy, and the need to extend working lives beyond traditional retirement ages, with individuals choosing, and also being required by law, to work longer. Indeed, in the UK, government has also stressed that increases in life expectancy presents them with no alternative other than to increase labour market participation of older workers. 2 As a result of this increase, the role of flexible working practices in providing a route for older workers with the ability to make choices regarding how long they choose to engage in work related tasks 3 has become important and widely discussed. These working practices have often been held up as a way to improve employment choices for older workers 4 , or provide bridge jobs to ease older workers into retirement. 5 Indeed, the DWP have also identified this type of work as providing older workers with a choice where they may opt for a phased approach to retirement. 6 This has led to the suggestions that retirement is no longer seen as a life defining event where workers leave the labour market for the final time, but instead a reversible state. 7 Moreover, research has demonstrated that 'financial security' is key in retirement planning 8 , suggesting that whilst it may be a choice to work past retirement, for those who have worked in low pay occupations where there is poor pension coverage, it may represent compulsion. 9 This may well be the case, as whilst we have seen increases in employment rates in the over 50s and over 60s it is worth noting that this increase has been in full-time work, not part-time work. 10 This suggests that people are simply staying in the labour market longer, rather than bridging their way into retirement or 'un-retiring' via the use of flexible working practices. Thus, we have a growing life expectancy that has encouraged government to pursue a policy of increasing labour market participation of older workers, alongside decreasing access to occupational pension provision. 11 Despite the importance placed on the role of flexibility by government and policy makers, research has revealed that when interviewed, older workers

Active Ageing, Pensions and Retirement in the UK

“…At the same time, active ageing policies, including economic incentives to continue working in later life, need to be accompanied by policies that enable older workers who want to work to remain active in the paid labour market, focusing on i-deals (Loretto 2016 ). Unless sustainable pension provision with adequate income in retirement is enacted, there is a danger that more individuals will be compelled to work in insecure forms of paid employment or face an insecure retirement (Phillipson 2012 ; Grady 2016 ; Lain 2016 ). Therefore there is a need to develop a more comprehensive approach to active ageing in the UK which supports retirement as a period of financial security.…”

“…The neoliberal ideology challenged whether the government should provide pensions above a minimum and promoted the role of individual responsibility and markets in providing for individual needs. Retrenchment was justified through a dominant hegemonic narrative of a ‘pension crisis’ in order to enact pension reform along free market principles (Moulaert and Biggs 2012 ; Macnicol 2015 ; Grady 2016 ). Neoliberals asserted that population ageing would have the effect of overwhelming public pension systems, proving unsustainable and creating unfair tax burdens on working age citizens (Foster 2010 ).…”

“…There are also concerns that the 8% contribution rate is insufficient. As such Grady ( 2016 ) argues that the likely outcome of auto-enrolment will be an increased working life for many as recipients will be unable to adequately supplement their work income with their pension. In this context non-retirement may be representative of coercion rather than personal choice.…”

“…However, in practice there may be little choice in the decision-making in the context of an increased SPA. Financial security is highly significant in retirement planning, suggesting that whilst it may be a choice to work past retirement, it may represent compulsion for those with inadequate pension coverage (Grady 2016 ). Furthermore, with the exception of women working part-time (and often on an informal basis to fit with caring responsibilities), relatively few older workers have access to flexible working (Loretto and Vickerstaff 2015 ).…”

“…While a neoliberal policy approaches may be steering an individual approach to pension saving (Grady 2016 ), the male breadwinner ideology is still prevalent in pension decision-making and women still undertake greater levels of caring responsibilities at all stages of the life-course (Scott and Clery 2012 ). Therefore, a comprehensive active ageing strategy needs to recognise the different trajectories women often face and not penalise women (and men) who diverge from traditional male patterns of employment (it is also worth noting that for many men working patterns have changed with more frequent movement between employers and an expansion in self-employment).…”